41Adjustment of contributions to outgoings

41 Adjustment of contributions to outgoings (a) there is to be an adjustment between the landlord and the tenant for each accounting period of the landlord to take account of an under-payment or over-payment by the tenant in respect of outgoings during the period; (b) the adjustment is to take place within one month after the landlord gives the tenant the outgoings statement mentioned in section 40 for the period concerned and is in any event to take place within 4 months after the end of that period; (c) the adjustment is to be calculated on the basis of the difference between: (i) the total amount of outgoings for which the tenant contributed (that is, the estimated total expenditure by the landlord on outgoings during the period concerned); and (ii) the total amount actually expended by the landlord for those outgoings during that period, but taking into account only expenditure properly and reasonably incurred by the landlord in payment of those outgoings; (d) contribution by the tenant towards repairs and maintenance is not taken into account for the purposes of the adjustment to the extent that the contribution is required to be paid into a sinking fund as mentioned in section 35; (e) expenditure by the landlord in respect of repairs and maintenance is not taken into account for the purposes of the adjustment to the extent that the expenditure is in respect of contributions required to be paid into a sinking fund as mentioned in section 35.

Business Tenancies (Fair Dealings) Act 2003 35